Plan your family before you plan your house


Bob and Celeste plan to buy a house. Counting both their incomes, they make enough for a big four-bedroom colonial. But the couple isn't sure. They hope to have a baby soon and Celeste thinks she might leave her law firm for a couple of years to be with the baby. Should they buy the big colonial anyway?

The right answer is yes or no -- depending on personal preference. But it's crucial that Bob and Celeste decide how much they want to spend before they go out to kick bricks, realty and personal finance specialists say. Otherwise, the emotions of the buying process may make them sacrifice family options, a course they'll later regret.

"This is a life issue. It's not a financial issue and it's not rocket science," says Lynn Hopewell, a financial planner in Falls Church, Va.

Many couples can't qualify for any mortgage unless both partners' incomes are counted, says Dorcas Helfant, president of the National Association of Realtors. But among families who can afford a house on just one income, many are buying less house to meet family priorities, she contends.

"People want more breathing room financially," she says.

Since the Persian Gulf war, Ms. Helfant believes, many Americans have gravitated increasingly to traditional values, and the notion of one parent (usually the mother) staying home with small children has become more appealing.

Many families are scaling back their ambitions -- choosing less expensive homes -- to let one parent remain home.

"They're doing a better job planning for their families rather than just looking at the monthly mortgage payment," Ms. Helfant says.

For those debating whether to buy to their earning capacity, realty and personal finance specialists offer these thoughts:

* Discuss your child-care plans before you're in the throes of the home selection process.

Some couples are certain they'll take only a maternity (or paternity) leave.

But if you're uncertain about plans for a protracted parental leave, discuss the trade-offs a high mortgage payment would require.

After talking, the fictitious Bob and Celeste might decide to buy a medium-priced ranch house instead of the expensive four-bedroom colonial that dual paychecks could bankroll. The smaller house lets them keep their financial options open.

To spare yourself a lot of emotional wear and tear, set a ceiling on the house payments you're willing to make before home-shopping, Ms. Helfant says. Too many couples wait until they're down to the wire, she says.

At that point, she says, "Normally the argument is between two particular properties."

* Keep your options open if you don't know what you'll do once your children are born.

"It's one thing to talk about having children theoretically. It's another to have the little sweet darling bouncing on your knee," says Mr. Hopewell, the Virginia financial planner. Many of his clients have become unplanned career dropouts after their children were born, he notes.

* Don't let anyone pressure you into spending more on housing than you planned.

Whether it involves houses, cars or any other consumer durable, some salespeople use a technique called "up-selling." You might start shopping with a midpriced ranch house in mind, and be pressured by a realty agent to consider pricier homes -- even if they would stretch you financially.

It was easier to convince couples to buy expensive homes in an era when home prices were galloping. But homes aren't appreciating as fast as they did during the 1980s. Today, a purchase must carry more weight as a solution to a family's lifestyle quest, says William Fried, author of Your American Dream Home (ECV Publishing).

Good realty agents care less about making a sale and earning a big commission than about satisfying a buyer's needs, Mr. Fried explains. "They know very, very well that the only asset they have in the business are past customers who become repeat customers or the source of referrals."

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